Experts weigh Brexit woes

U scholars discuss the political and economic implications of Britain’s historic referendum.

Raju Chaduvula

On Thursday, Britain voted to leave the European Union after a 43-year stint with the bloc. Britain will become the first country to relinquish its EU membership.

Following the referendum — with 52 percent of Britons voting to leave and 48 voting to remain — financial markets around the world fell at alarming rates. 

Since the vote, markets in the U.S. and Britain have dipped more than 3 percent. Many experts predicted the economic rout, and while the British pound has recovered marginally since Friday, the economy remains volatile.

“Financial markets are [about] betting on what everyone else is thinking. … The air of uncertainty doesn’t help,” said Robert Kudrle, Freeman chair of international trade and investment policy at the University of Minnesota. 

According to Kudrle, the negative effects of the split will be worse for Britain and the EU, but it’s uncertain how long that effect will last. The uncertainty of global stock markets will make it hard for any new long-term investments, he said.

Many market vulnerabilities spurred by Britain’s decision to leave stem from the economic purpose of the bloc.

The European Union was created to ensure free trade and mobility of people between countries, noted Gary Cohen, a University history professor specializing in modern European social and political history. The EU’s purpose is to hold the interests of individual countries as well the interests of the continent, he said.

A referendum to leave the EU is nothing new to Britain. In 1975, two years after Britain joined the union, a similar referendum was introduced but failed to pass, said Anna Clark, professor of British history at the University. 

This time, the campaign to leave was conducted by the U.K. Independence Party and involved a platform of anti-immigration rhetoric, Clark said. 

Many living in rural Britain, where there aren’t large concentrations of immigrants, voted to leave, whilemuch of Britain’s youth voted to remain, she said.  

University professor of history Thomas Wolfe said Euroscepticism — the critique of the validity of the EU — was prominent in Britain in the 1990s and continued with party leader Nigel Farage and the UKIP during the last 10 years. 

The referendum could motivate other countries to back out of the EU, especially after other member-nations see how Britain fares in the next few years, Wolfe said.

According to Article 50 of the Lisbon Treaty,  Britain has two years to establish the terms of its severance from the EU.

“The exiters look toward a bygone era. … The costs and losses [of the leave] might well be very high,” Cohen said. 

Amy Stone, a student at the Royal Holloway, University of London, voted to stay and said in an email that there is fear of a recession due to the fall in the value of the pound, which could make it harder for young people to get jobs in the future. 

“[The vote] has also split the nation in terms of opinion, so the sense of general patriotism [and] community has faded, which will have ramifications as we go forward as a nation,” Stone said. 

Scotland is likely to reintroduce a 2014 referendum to separate from the U.K., Clark said.

“It really is a sad day for Britain,” she said.